SWOT Analysis / TOWS Matrix for Borussia Dortmund (Germany)
Based on various researches at Oak Spring University , Borussia Dortmund is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, there is backlash against globalization, challanges to central banks by blockchain based private currencies, wage bills are increasing, there is increasing trade war between United States & China, central banks are concerned over increasing inflation,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, etc
Introduction to SWOT Analysis of Borussia Dortmund
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Borussia Dortmund can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Borussia Dortmund, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Borussia Dortmund operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Borussia Dortmund can be done for the following purposes –
1. Strategic planning of Borussia Dortmund
2. Improving business portfolio management of Borussia Dortmund
3. Assessing feasibility of the new initiative in Germany
4. Making a Recreational Activities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Borussia Dortmund
Strengths of Borussia Dortmund | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Borussia Dortmund are -
High switching costs
– The high switching costs that Borussia Dortmund has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
High brand equity
– Borussia Dortmund has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Borussia Dortmund to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Borussia Dortmund is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Borussia Dortmund is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Borussia Dortmund emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Borussia Dortmund
– The covid-19 pandemic has put organizational resilience at the centre of everthing Borussia Dortmund does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Borussia Dortmund is one of the most innovative firm in Recreational Activities sector.
Cross disciplinary teams
– Horizontal connected teams at the Borussia Dortmund are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to lead change in Recreational Activities
– Borussia Dortmund is one of the leading players in the Recreational Activities industry in Germany. Over the years it has not only transformed the business landscape in the Recreational Activities industry in Germany but also across the existing markets. The ability to lead change has enabled Borussia Dortmund in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Recreational Activities industry
– Borussia Dortmund has clearly differentiated products in the market place. This has enabled Borussia Dortmund to fetch slight price premium compare to the competitors in the Recreational Activities industry. The sustainable margins have also helped Borussia Dortmund to invest into research and development (R&D) and innovation.
Analytics focus
– Borussia Dortmund is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Recreational Activities industry. The technology infrastructure of Germany is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Low bargaining power of suppliers
– Suppliers of Borussia Dortmund in the Services sector have low bargaining power. Borussia Dortmund has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Borussia Dortmund to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management in the Recreational Activities industry
– Borussia Dortmund is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Borussia Dortmund is present in almost all the verticals within the Recreational Activities industry. This has provided Borussia Dortmund a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Weaknesses of Borussia Dortmund | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Borussia Dortmund are -
Skills based hiring in Recreational Activities industry
– The stress on hiring functional specialists at Borussia Dortmund has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Compensation and incentives
– The revenue per employee of Borussia Dortmund is just above the Recreational Activities industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Increasing silos among functional specialists
– The organizational structure of Borussia Dortmund is dominated by functional specialists. It is not different from other players in the Recreational Activities industry, but Borussia Dortmund needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Borussia Dortmund to focus more on services in the Recreational Activities industry rather than just following the product oriented approach.
Need for greater diversity
– Borussia Dortmund has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Employees’ less understanding of Borussia Dortmund strategy
– From the outside it seems that the employees of Borussia Dortmund don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to strategic competitive environment developments
– As Borussia Dortmund is one of the leading players in the Recreational Activities industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Recreational Activities industry in last five years.
Workers concerns about automation
– As automation is fast increasing in the Recreational Activities industry, Borussia Dortmund needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High bargaining power of channel partners in Recreational Activities industry
– because of the regulatory requirements in Germany, Borussia Dortmund is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Recreational Activities industry.
Aligning sales with marketing
– From the outside it seems that Borussia Dortmund needs to have more collaboration between its sales team and marketing team. Sales professionals in the Recreational Activities industry have deep experience in developing customer relationships. Marketing department at Borussia Dortmund can leverage the sales team experience to cultivate customer relationships as Borussia Dortmund is planning to shift buying processes online.
No frontier risks strategy
– From the 10K / annual statement of Borussia Dortmund, it seems that company is thinking out the frontier risks that can impact Recreational Activities industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Low market penetration in new markets
– Outside its home market of Germany, Borussia Dortmund needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Borussia Dortmund Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Borussia Dortmund are -
Manufacturing automation
– Borussia Dortmund can use the latest technology developments to improve its manufacturing and designing process in Recreational Activities sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Recreational Activities industry, but it has also influenced the consumer preferences. Borussia Dortmund can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Borussia Dortmund can use these opportunities to build new business models that can help the communities that Borussia Dortmund operates in. Secondly it can use opportunities from government spending in Recreational Activities sector.
Using analytics as competitive advantage
– Borussia Dortmund has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Recreational Activities sector. This continuous investment in analytics has enabled Borussia Dortmund to build a competitive advantage using analytics. The analytics driven competitive advantage can help Borussia Dortmund to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Borussia Dortmund can develop new processes and procedures in Recreational Activities industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Use of Bitcoin and other crypto currencies for transactions in Recreational Activities industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Borussia Dortmund in the Recreational Activities industry. Now Borussia Dortmund can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Borussia Dortmund can improve the customer journey of consumers in the Recreational Activities industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Borussia Dortmund to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Borussia Dortmund to hire the very best people irrespective of their geographical location.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Borussia Dortmund to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Borussia Dortmund can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Borussia Dortmund can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Recreational Activities industry.
Creating value in data economy
– The success of analytics program of Borussia Dortmund has opened avenues for new revenue streams for the organization in Recreational Activities industry. This can help Borussia Dortmund to build a more holistic ecosystem for Borussia Dortmund products in the Recreational Activities industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Borussia Dortmund is facing challenges because of the dominance of functional experts in the organization. Borussia Dortmund can utilize new technology in the field of Recreational Activities industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Borussia Dortmund External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Borussia Dortmund are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Borussia Dortmund business can come under increasing regulations regarding data privacy, data security, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Borussia Dortmund will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
High dependence on third party suppliers
– Borussia Dortmund high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Easy access to finance
– Easy access to finance in Recreational Activities industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Borussia Dortmund can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Borussia Dortmund in Recreational Activities industry. The Recreational Activities industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Borussia Dortmund may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Recreational Activities sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Borussia Dortmund can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate Borussia Dortmund prominent markets.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Recreational Activities industry are lowering. It can presents Borussia Dortmund with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Recreational Activities sector.
Environmental challenges
– Borussia Dortmund needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Borussia Dortmund can take advantage of this fund but it will also bring new competitors in the Recreational Activities industry.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Borussia Dortmund.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Borussia Dortmund in the Recreational Activities sector and impact the bottomline of the organization.
Consumer confidence and its impact on Borussia Dortmund demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Recreational Activities industry and other sectors.
Stagnating economy with rate increase
– Borussia Dortmund can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Recreational Activities industry.
Weighted SWOT Analysis of Borussia Dortmund Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Borussia Dortmund needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of Borussia Dortmund is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of Borussia Dortmund is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Borussia Dortmund to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Borussia Dortmund needs to make to build a sustainable competitive advantage.